Long Term Care Insurance
7 reasons you should consider Long-Term Care Insurance
Professionals who study risk management say that individuals have several choices when dealing with risk.
These choices include:
1) avoiding the risk,
2) retaining the risk, or
3) transferring the risk
* Availability varies by carrier and state.
When it comes to the issue of long-term care, people may avoid addressing the risk because they don’t understand the potential for needing services. They may choose to retain the risk because they don’t understand the potentially high cost of care. Or they may transfer the risk as part of a bigger strategy surrounding their overall financial situation. Each person’s decision-making process is driven by different concerns and priorities. Here are seven reasons you should consider transferring the risk of a long-term care experience through the purchase of long-term care insurance.
Economics - Protecting your assets
In the absence of other resources such as insurance, it may be necessary to pay forlong-term care expenses out-of-pocket. This may include selling off assets, using your savings, borrowing from family, or taking a loan against your life insurance. These options, although possible, are probably not what you had in mind when you began saving for your future. Long-term care insurance may be an affordable way to help protect a much larger portion of your finances against an unexpected need for care.1
Opportunity Cost - Freeing up your money
If you choose to retain the risk and self-fund the potential cost of long-term care, you must set aside a considerable portion of your assets as a “rainy day” fund. By nsuring part of this risk, those assets are free to support the quality of life you expect for you and your family in retirement or to be used for other worthwhile purposes, such as charitable donations or creating a nest egg for your loved ones.
Control - Having your own way
A bottom-line issue in long-term care is control. If you someday need long-term care services, you may find that you are not in a position to control how funding those costs is handled, which may include the sale of valued assets. By insuring part of the risk, you help increase the possibility that your assets will be treated and/or distributed according to your wishes.
Another important element of control is deciding where care will be provided. Long term care services may be provided in any number of settings, including in your own home, an assisted care living facility, adult day care, or nursing facility. Being able to decide where you wish to receive care is often tied to your financial resources at the time of need.
Protection
Most people have homeowners and auto insurance, but if you scratched the paint on your car or a neighborhood kid threw a baseball through your window, you might pay those expenses without filing a claim because the cost is manageable. You have the insurance anyway, though, because you believe it’s just a good idea to be protected. The need for long-term care services may have a much bigger effect on your finances than a scratched car or a broken window. Long-term care insurance is a lot like your homeowner’s or auto coverage—you hope you never need to use it, but if you do, you will be glad the protection is there.
Quality of Care - The privilege of choosing your caregiver
Most people agree that the preferred place to receive quality care is in the privacy and comfort of your own home. However, depending on the type of care you receive, home care may be just as expensive as care received in a facility. By insuring for the long-term care risk, you may be assured that care expenses will be less of a concern when receiving the best home care available. Should institutional care better fit your needs, you may have funds on hand to pay for the facility you prefer, rather than the one you can afford.
Timing - Creating a window of time
Life insurance helps to provide a window of time for your heirs. It ensures they do not have to liquidate assets right away to pay for estate or probate costs under possibly disadvantageous circumstances. Long-term care insurance can help in a similar manner. Assets may not need to be liquidated to fund long-term care costs—or at the very east, you may have time to think about how, when, and what you might liquidate.
Family Considerations - Stressful decisions
An unexpected need for long-term care services can create stress for family members confronted with issues of caregiving. Caregiving can take an emotional and physical toll on family members who may have to help with bathing, dressing, and other tasks associated with custodial care. It can also have a financial impact on family caregivers who have to miss time from work, change from full-time to part-time employment, or even leave their job completely.
Find Out More
Adding long-term care insurance to your portfolio can provide you and your loved ones with increased flexibility and protection. To find out more, talk to me today.
1Long-term care services are not generally covered by private health insurance. Limited long-term care services may be covered by government-run programs such as Medicare and Medicaid, but these programs have stringent qualification rules and coverage limitations.
The purpose of this material is solicitation of insurance. An insurance Agent may contact you. Long-term care insurance is issued on policy form LTC6. The policy may have exclusions and limitations. For cost and complete details of coverage, contact your Agent or the company.